Australian Property

Viewing posts in the Australian Property category

Who will police foreign buying rules, Ms O’Dwyer?

images Kelly O’Dwyer, chairwoman of the House Economics Committee, said at the Bloomberg Summit in Sydney today of the FIRB that it: ‘‘...has demonstrated that they have not been doing their job in that regard...In order to give confidence to people you have to have a regime that will be property enforced...FIRB said that we think everybody is complying a little bit better. I think that defies credibility...We are looking at a civil penalty regime that would apply to people who contravene the rules. We are actually looking at a sliding scale that would attach to the value of the property when...
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BIS warns on Australian housing values

ScreenHunter_30 Oct. 10 06.15 By Leith van Onselen The Bank for International Settlements (BIS) - the central banks' central bank - released a new report over the weekend proclaiming that Australian housing is severely over valued: Graph 2 juxtaposes recent house price growth rates with the deviation of current valuation ratios from their longer-term average values for the countries in the database with sufficiently long series. 13 The horizontal axis in both panels measures the three-year growth rate of residential property prices for each country on the basis of the selected price series. The graph clearly shows the...
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Melbourne’s tower fetish creates indigestion

ScreenHunter_07 Feb. 10 11.46 By Leith van Onselen The Age is running an article today about how Melbourne's inner-city livability is being eroded by rapid development, which is placing  extreme pressure on public amenities, like parks: Melbourne is facing a shortage of public parks and sporting grounds, as skyscraper developers swoop on the city's best blocks and price government out of the market... Concerns have also been raised about the supply of sporting grounds in the inner city and beyond. ...the council has estimated that by 2031 the municipality will be facing a shortfall of 12 ovals and 12 soccer pitches,...
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Auction clearances retrace

ScreenHunter_07 Mar. 20 20.55 The national auction clearance rate slid over the weekend on the back of declines in Sydney and Melbourne. According to RP Data, the national weighted average preliminary auction clearance rate was 70.8% over the weekend, which was down 3.6% from the 74.4% preliminary clearance rate reported last weekend. Sydney’s clearance rate fell by 4.1% to 78.3%, whereas Melbourne’s fell to 70.5% (last weekend 75.1%). Brisbane, which typically only has a small number of auctions, experienced no change in its clearance rate (still 49.4%. However, overall auction volumes (2,055) were up on last...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 14 September 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Sydney mortgage speculation exits galaxy

ScreenHunter_4187 Sep. 12 11.45 By Leith van Onselen The speculator frenzy that has engulfed Sydney’s housing market grows more absurd by the month, with today’s Lending Finance data for July, released by the ABS, once again smashing all records, with both the value and proportion of mortgages going to New South Wales investors surging to another all time high. As shown below, the value of investor loans in New South Wales (read Sydney) continues to rocket, with Victoria (read Melbourne) – the second hottest market – also experiencing strong growth: According to the ABS, investor finance commitments in New...
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Has Labor just backed a broad-based land tax?

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In welcome news, the Federal Labor Party has reportedly backed replacing inefficient and inequitable stamp duties with a "property tax". From The AFR: Labor has backed the concept of replacing stamp duty with a property tax as part of a tax reform agenda it is developing to make housing more affordable... Mr Bowen cautioned he was “not flagging changes” to negative gearing but lauded the June 2012 change by the ACT Labor government in which stamp duties will be phased out over two decades in return for a property tax, introduced as a large hike in rates. “The...
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Weekly RP Data Australian house price update

ScreenHunter_15 Mar. 05 15.42 By Leith van Onselen In the week ended 11 September 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.53% (see next chart). Home prices fell in all major capitals except Adelaide (see next chart). Values are up down by 0.59% so far in September, again with all major capitals except for Adelaide falling (see next chart). Since the start of the year, home values nationally have risen by 5.58%, with all major capitals except Perth rising (see next chart). Over the past 12 months, home values have...
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Commercial property bubble as well…

imgres From the AFR: Australian commercial real estate is overheating, according to some of the country’s most prominent executives, who are starting to heavily scrutinise the market. ...Yields for office towers this year have compressed, 52 Martin Place in Sydney sold at 5.17 per cent. Retail is also showing some heat with Lend Lease’s Real Estate Partners 3 shopping centre fund likely to show about 6 per cent. Abacus Property Group managing director Frank Wolf, who has made several astute property transactions in the in the last 6 months, has joined the chorus. “We are very concerned...
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A look at Australia’s high risk mortgage market

ScreenHunter_4120 Sep. 10 12.26 By Leith van Onselen Above is an interesting segment aired last night on ABC's The Business examining Australia's high risk mortgage market. The segment features an interview with an anonymous mortgage broker "insider" who spills the beans on some of the dodgy tactics used in the lead-up to the GFC, with the insider fingering Macquarie Bank and StGeorge, in particular. It also features Digital Finance Analytics' Martin North, who highlights the recent increase in high LVR lending to certain lower income groups and young families, as well as the explosion of lending for speculative property...
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Choked housing supply is very real

ScreenHunter_4106 Sep. 09 23.03 By Leith van Onselen Earlier today, Cameron Murray, Phil Soos and Paul Egan (the "three musketeers") co-authored what was meant to be a knock-out blow to those whom believe that Australia's unaffordable housing has been driven in part by choked supply. Instead they argued that "Australia has built a persistently responsive supply of new dwellings, relative to the flow of new net population" and that "assertions of a housing shortage and/or restricted supply are not supported by long-term data and a host of metrics". Long-time readers will be aware that I do not buy the argument that...
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The great housing shortage myth

sp-ag-140313-graph14-small The claim of an Australian land and housing shortage is a myth of epic proportions, perpetuated by vested interests across the media landscape. An Internet search for the phrase ‘Australian land shortage’ produces a deluge of pronouncements confirming this view. Those with an intimate knowledge of property-related data, or with experience in the development industry, can tell you that the alleged housing shortage is fiction. It is in the developers’ best interests, however, to remain quiet and reap windfall gains from beneficial rezoning (surely betterment taxes should be imposed on that?)....
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Who’s to blame for Australia’s housing bubble?

ScreenHunter_24 Jun. 20 19.46 By Leith van Onselen My buddies over at Prosper Australia have appeared before the Senate Inquiry into Housing Affordability and given the politico-housing complex a big serve. From The AFR: [Prosper] called on the inquiry to “critically reconsider” any “simple” claims that high housing prices are the result of a housing shortage. “If we are faced with a genuine mismatch between supply and demand, rents would have risen dramatically,” its ­submission said. “They have not, except for a short period between 2007 and 2010. A solitary focus upon supply and demand is a convenient...
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New home finance still going strong

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen Today’s housing finance data for June confirmed that buyer demand for newly constructed dwellings remains quite strong (see next chart). Despite falling by a seasonally adjusted 0.8% in July, the number of finance commitments for new dwellings (i.e. construction plus new) are up 8.6% over the year and tracking some 16% above the 5-year moving average level (5YMA). And despite the current 'boom' so far being smaller than the post-GFC episode (which was fueled by significant first home buyer stimulus), it does at least appear to be more enduring, which is good news...
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Investor mortgage bubble enters blow-off phase

ScreenHunter_12 Sep. 23 12.54 By Leith van Onselen The Australian Bureau of Statistics (ABS) has released housing finance data for the month of July, which registered a 0.3% seasonally-adjusted rise in the number of owner-occupied finance commitments over the month: The result missed analysts’ expectations, who had expected a 1.0% rise in finance commitments in July. The number of owner-occupied housing finance commitments excluding refinancings fell by a seasonally-adjusted 0.7% over the month to be tracking 7% above the five-year moving average level. However, they were down 0.7% on July 2013 and look to be...
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“Mad” Adam’s bubble grows

believe-in-yourself-schmidt By Leith van Onselen "Mad" Adam Carr is back, this time slamming the notion that Australian housing is overvalued and that now might not be a sensible time to buy given the increasing risks of a property correction. Let's examine Carr's arguments. The issue isn’t whether house prices fall; we know they do at times. The issue is whether purchasing property makes sense -- whether it’s an intelligent decision and enhances wealth (for either owner-occupiers or investors) over a reasonable time period. The answer is an unequivocal yes and it’s foolish -- not to mention extremely misleading --...
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Moody’s describes the new property bubble

.jbjb Moody's has a nice description of the re-inflating Australian housing bubble today: Australian Banks Resilient to Housing Stress, But Tail Risks Are Rising Concerns Over Sustainability as Australian House Prices Rise. Residential house prices have been rising rapidly in recent quarters, increasing by close to 14% since May 2013 (Exhibit J in the Appendix). The recent rise resumes the upward trend in home prices seen over the past two decades. While a further acceleration in prices could over time become credit-negative,2 housing market developments on their own are unlikely to cause significant...
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Xenophon sees the light on housing, Budget

ScreenHunter_4056 Sep. 08 12.02 By Leith van Onselen After being smashed from pillar to post over his hare-brained scheme to allow first home buyers to access their superannuation savings to pay a house deposit (see here, here and here), independent Senator for South Australia, Nick Xenophon, has seemingly abandoned that proposal and produced a sensible list of alternative measures to fix the Budget, including 'abolishing' negative gearing and making superannuation concessions fairer. From News.com.au: This Budget is regressive. It hurts the needy while protecting the greedy... So how should we repair the Budget bottom...
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Meanwhile, on the bubble front line…

imgres From a real estate colleague of mine in Melbourne: I just wanted to give you an example of how heated our property market is. A property a couple of doors down from where I live (Glen Waverley) sold by private sale in early July 14 through Hocking Stuart. The property was on the market for about 5 weeks before it sold. The property sold for $1.1 million to an Indian investor – which is overvalued by about 20% - but it is about what you would expect in this market. After a 30 day settlement the property went up for auction with Ray White at the start of August 2014. The auction was...
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NZ shows Australia how to address housing policy

imgres By Leith van Onselen In the lead-up to the 2013 Australian federal election, the issue of housing affordability received zero attention from Australia's major political parties, and no public debate. For example, of the 48 discussion papers outlining the Coalition’s policies on just about everything - including such useless topics as "creating a green army”- there was no policy on the single biggest purchase anyone will make and by far the biggest asset class in Australia. By way of comparison, compare Australia’s neglect of housing policy against the above debate on New Zealand’s...
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MB Radio: LVO, DLS and Lindsay David discuss the great property blowoff

imgres With 'Hog Wild' investors pushing Australian real estate to all time highs, as the global macro backdrop turns more ominous and the domestic economy prepares for a more austere environment, Gunnamatta spoke with David Llewellyn Smith, Leith Van Onselen, and Lindsay David, author of 'Australia: Boom to bust' about the dizzying ascent of Australian real estate, the economic view from the peak, and where Australia's body politic goes from there. The discussion runs about 35 minutes, looks at the distinctiveness of Australia's approach to real estate, and the factors meaning there is no going back from...
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RP Data weekend property market update

ScreenHunter_18 Mar. 18 17.58 Click to view RP Data’s latest weekly housing market update, which provides a useful snapshot of the housing market as at 7 September 2014. This week’s report includes: Latest weekly dwelling value results; Auction results & clearance rates; Latest median house & unit prices; Average time on market & vendor discounts; Mortgage market activity; and New listings...
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Auction clearances firming

ScreenHunter_19 Mar. 13 13.12 The national auction clearance rate rose again over the weekend on the back of rises in Sydney, Melbourne and Brisbane. According to RP Data, the national weighted average preliminary auction clearance rate was 74.4% over the weekend, which was up 2.2% from the 72.2% preliminary clearance rate reported last weekend. Sydney’s clearance rate rose by 1.3% to 82.4%, whereas Melbourne’s rose to 75.1% (last weekend 71.0%). Brisbane, which typically only has a small number of auctions, experienced a increase in its clearance rate to 49.4% from 47.0% the weekend before. However, overall auction...
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Bob Day slams Australia’s housing rentiers

ScreenHunter_4036 Sep. 05 09.01 By Leith van Onselen If you get a spare 25 minutes today, you must watch the above maiden parliamentary speech by senator Bob Day, presented on Wednesday. In the speech, Senator Day tackles two major issues: Australia's budding youth unemployment crisis, where he proposes to allow younger workers to 'opt-out' of current workplace laws and set their own terms in order to gain work; and Australia's housing affordability crisis, where Day is scathing on rent-seeking vested interests - including the property industry and state governments - who have colluded to bestow ridiculously expensive...
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Weekly RP Data Australian house price update

ScreenHunter_07 Mar. 20 20.55 By Leith van Onselen In the week ended 4 September 2014, the RP Data-Rismark 5-city daily dwelling price index, which covers the five major capital city markets, fell by 0.20% (see next chart). Home prices fell in three major capitals and rose in two (see next chart). Values are up by 6.14% so far in 2014, with all major capitals except for Perth experiencing growth, and particularly strong gains recorded in Sydney and Melbourne (see next chart). Over the past 12 months, home values have risen by 10.74% at the 5-city level, led by Sydney and Melbourne (see next...
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